Predicting the pricing plan

Predicting Trump’s prescription drug pricing plan

A plan for reducing prescription drug prices slated for release at a White House event next month will highlight HHS Secretary Alex Azar’s aspirations to narrow the gap between net and list prices. It also will seek to remove impediments to value-based contracting, reduce out-of-pocket costs for some Medicare beneficiaries, and intensify FDA’s efforts to sweep aside anticompetitive practices that keep generic and biosimilar drugs off the market.

The plan is a work in progress, but Azar and other senior HHS officials have previewed some of its contents and their underlying ideas in speeches, congressional testimony and background discussions.

Correlating those ideas with political imperatives -- especially President Donald Trump’s continued promises to slash drug prices -- makes it possible to predict key features of the plan.

Azar is enthusiastic about more closely aligning net and list prices because success would be immediately obvious to Americans with insurance plans that calculate copays as a percentage of list prices.

“It will require some degree of federal intervention -- perhaps even an uncomfortable degree.”

Alex Azar, HHS

He will almost certainly try to force Medicare Part D plans to pass on a portion of drug company rebates and discounts to beneficiaries at the pharmacy counter. And he’ll push for transparency about out-of-pocket costs, so patients know before they reach the pharmacy what they’ll have to pay, and whether there are less costly alternatives.

The plan will definitely include steps to promote value-based drug purchasing, including changes to Medicaid regulations that are needed to make more drug companies comfortable entering outcomes-based contracts.

It also will build on commitments FDA Commissioner Scott Gottlieb has made to prevent branded drug manufacturers from

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